One of the many attractive aspects of Voice over Internet Protocol systems is that they are far more affordable than legacy office PBX switches, and this is in great part because they are exempt from many regulatory fees. At a time when VoIP services are enjoying widespread adoption across the United States, telecommunications regulators are seeking to impose oversight and extract fees; however, a recent federal appeals court decision has stopped such efforts.

Court Rules on VoIP Regulations

In a case before the Eighth Circuit Court of Appeals, two of the three-panel judges issued a ruling that prevents state regulators from applying fees and taxes on VoIP services. The case started at the federal circuit level in Minnesota, where a major cable internet provider spun off a business unit dedicated exclusively to installing and maintaining VoIP services. The Minnesota Department of Commerce moved to impose regulatory oversight over Charter Advanced Services, which would have paved the way for state taxation.

Charter prevailed in court, thus prompting the state to pursue an appeal. The Eighth Circuit Court of Appeals sided with Charter and established a precedent that will prevent state regulators from collecting taxes and fees from VoIP service. The crux of the matter is that the appellate court determined that VoIP is an information service that should be regulated by the Federal Trade Commission.

VoIP service has been exempt from state taxation since the passing of the Telecommunications Act in 1996; the component of the law that gives VoIP providers certain freedoms and flexibility, at least in comparison to telephone companies, has been ratified in 2015 and once again last year. For the time being the FTC does not plan on imposing taxes and fees; for this to change, federal laws would need to be amended, and the divided Congress under the Trump administration makes such a development unlikely to happen.

The Future Growth of VoIP Services

Telecom firms that provide VoIP service in addition to legacy phone service are now in a complicated spot since they may fall under the regulatory purview of both the FTC and the Federal Communications Commission, which means that business owners in the High Desert are more likely to pay less for their VoIP services when they choose a non-telecom provider such as Sonic VoIP in Victorville.

Operating with less oversight than telecom companies allows VoIP providers greater flexibility in terms of keeping business clients happy. When you are ready to pay less for your business telecommunications needs, be sure to contact Sonic VoIP.[/su_column]